Quiz: Parties to an Annuity

Sue, an annuity owner, names her 15-year-old son and 10-year-old daughter as joint annuitants of her contract. Upon whose life (or lives) are income payments determined? A. Sue's son's life B. Sue's life C. the joint life expectancy of Sue's son and daughter D. Sue's daughter's life

C. the joint life expectancy of Sue's son and daughter If two people are named jointly as annuitants, then their joint life expectancy is the measurement for the contract's income payments.

George purchased an annuity in which his wife will receive income for as long as she lives. In this scenario, what is George most correctly called? A. the agent B. the beneficiary C. the owner D. the annuitant

C. the owner The annuity owner is the person (or entity) who buys the contract.

Ann is the beneficiary of an annuity owned by Jim (who is also the annuitant). Jim intended to annuitize the contract at retirement but died shortly before retiring. What benefits will Ann receive from the annuity? A. Ann's right to any funds will be based on the income payout option that Jim selected. B. Ann will receive the annuity's accumulated value and may select a payout option. C. Ann will receive income for life. D. Ann will receive the contract's funds in a lump sum.

B. Ann will receive the annuity's accumulated value and may select a payout option. If the owner or annuitant dies before the contract has annuitized, the beneficiary will receive the contract's funds.

What is the only restriction on naming an annuitant? A. The annuitant must not be related to the owner. B. The annuitant must be a natural person. C. The annuitant can be a natural or non-natural person. D. The annuitant must be related to the owner.

B. The annuitant must be a natural person.